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Iranian Government Plans to Authorise Cryptocurrency Mining

July 11, 2019July 11, 2019

Abdol Nasser Hemmati, the governor of the Central Bank of Iran (CBI), announced yesterday that the government plans to authorise the mining of digital assets in the nation. However, those running computer systems to profit from their support of cryptocurrency networks will be charged for electricity at the country’s export price rather than the cheaper, subsidised rate.

Iran has reportedly become quite the hot spot for Bitcoin mining in recent months, thanks largely to its generous electricity subsidy. There are even reports of Chinese cryptocurrency miners relocating to the country to take advantage of the cheap rates.

New Executive Law to Authorise Cryptocurrency Mining in Iran

According to a report in domestic news publication PressTV, the governor of the CBI stated yesterday that the national government has already approved sections of an executive law that would allow for the mining of cryptocurrency by Iranian citizens.

Cryptocurrency miners are always on the lookout for cheap electricity to run the required sophisticated computer systems.

Abdol Nasser Hemmati added that there would be conditions to the authorisation. Firstly, he stated that the electricity rate charged to those mining cryptocurrency would be at the nation’s export rate. This ranges from about 7c to 10c per watt. Previously, many of the nation’s digital asset miners were using the heavily subsidised rate charged to regular Iranian citizens. At just 5c per watt, it’s understandable why such a surge in the activity has been reported lately.

The second condition stated by the bank governor was that mined cryptocurrency should “be fed back to the national economic cycle.” Presumably, this is a measure intended to crack down on the Chinese miners suspected of setting up in Iran to take advantage of the low-cost energy.

Interestingly, Hemmati added that any new currencies backed by other assets – currencies, gold, or anything else – would not be permitted by the CBI.

The announcement by the Iranian central banker comes as something of a surprise given recent events in the nation. The surge in the numbers of cryptocurrency miners exploiting the subsidised power there forced authorities to launch a crackdown. In the process, they reportedly seized thousands of computer systems from factories, greenhouses, mosques, and other locations.

Perhaps more baffling is the fact that cryptocurrency trading is currently illegal in Iran. NewsBTC reported on the nation’s deputy governor for new technologies confirming as such earlier this week. Those prosecuted for the activity could serve up to five years in jail. How the newly-authorised Iranian cryptocurrency miners are supposed to sell the cryptocurrency they are rewarded is anyone’s guess.

Many analysts have previously stated that Iran could benefit from adopting a cryptocurrency as a way to counteract the US economic sanctions against it. However, judging by its stance towards the technology in recent years, the nation seems more cautious to explore this, or better at hiding it, than the likes of North Korea.